Secondary

Think TCF Part Five

Outcome 5 of Treating Customers Fairly requires that “Clients have products that perform as FSPs told them it would, and the service is at an acceptable standard, and what they expect.”

It is important for advisors to heed the section highlighted in yellow above.

At a recent presentation by Leanne Jackson of the FSB, she pointed out the following:

The primary responsibility for outcomes relating to product design, product performance, after-sales service and flexibility will lie with product providers, but advisers can and should bring greater pressure to bear on providers, and perform appropriate due diligence.”

While the latter remains an important obligation for advisors, the often one-sided nature of broker contracts makes putting pressure on providers a rather difficult (and downright dangerous) task for all but the top producers.

In the Guidelines for FSPs, the following three questions are provided to help you understand what you need to know and do about this outcome:

  • Do you check product performance before you recommend it to your clients?
  • Is the service provided by product suppliers to clients after contracting stage satisfactory?
  • Do you give feedback to product suppliers about their products and services?

The first question relates to due diligence, not only from a legal angle, but certainly also from a client suitability perspective.

Most providers these days use systems which provide a clear path of the history of a product, from the application stage right through its life cycle. Whilst you may be able to use this to shift the blame for lack of service, failure on your side to follow up could see you standing in the same dock.

Most of us have become accustomed to the loads of paperwork required by FAIS, so this is nothing new – more “just in case” ammunition.

Some comfort can be taken from another comment by Leanne Jackson at the SAIFM conference:

TCF also seeks to rebalance responsibility for customer outcomes between advisers and product providers – providers will not be able to abdicate responsibility for the distribution channels they use.

Click below to download the applicable guides:

TCF – Guidance for small FSPs/ Independent Financial Advisors (IFAs) and

TCF – Guidance for Asset Managers

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